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August 2012 - Philippine Supreme Court Decisions/Resolutions

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August 2012 Decisions > G.R. No. 182435 - Lilia B. Luz,
ChanRobles On-Line
et al. v. Florante Baylon:
Bar Review

G.R. No. 182435 - Lilia B. Luz, et al. v. Florante Baylon

 SECOND DIVISION

[G.R. NO. 182435 - August 13, 2012]

LILIA B. ADA, LUZ B. ADANZA, FLORA C. BA YLON,

REMO BA YLON, JOSE BA YLON, ERIC BA YLON,
FLORENTINO BA YLON, and MA. RUBY BA YLON,
Petitioners, v. FLORANTE BA YLON, Respondent.

DECISION

REYES, J.:

Before this Court is a Petition for Review on Certiorari

under Rule 45 of the Rules of Court seeking to annul and
set aside the Decision 1 dated October 26, 2007 rendered
by the Court of Appeals (CA) in CA-G.R. CV No. 01746.
The assailed decision partially reversed and set aside
the Decision 2 dated October 20, 2005 issued ~y the
Regional Trial Court (RTC), Tan jay City, Negros Oriental,
Branch 43 in Civil Case No. 11657.

The Antecedent Facts

This case involves the estate of spouses Florentino

Baylon and Maximina Elnas Baylon (Spouses Baylon)
who died on November 7, 1961 and May 5, 1974,
respectively. 3 At the time of their death, Spouses Baylon
were survived by their legitimate children, namely, Rita
Baylon (Rita), Victoria Baylon (Victoria), Dolores Baylon
(Dolores), Panfila Gomez (Panfila), Ramon Baylon
(Ramon) and herein petitioner Lilia B. Ada (Lilia).

Dolores died intestate and without issue on August 4,

1976. Victoria died on November 11, 1981 and was
survived by her daughter, herein petitioner Luz B.
Adanza. Ramon died intestate on July 8, 1989 and was
survived by herein respondent Florante Baylon (Florante),
his child from his first marriage, as well as by petitioner
Flora Baylon, his second wife, and their legitimate
 children, namely, Ramon, Jr. and herein petitioners Remo,
Jose, Eric, Florentino and Ma. Ruby, all surnamed Baylon.

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On July 3, 1996, the petitioners filed with the RTC a
Complaint 4 for partition, accounting and damages
against Florante, Rita and Panfila. They alleged therein
that Spouses Baylon, during their lifetime, owned 43
parcels of land 5 all situated in Negros Oriental. After the

Wood Litigation, death

APC of Spouses Baylon, they claimed that Rita took
possession of the said parcels of land and appropriated
for herself the income from the same. Using the income
produced by the said parcels of land, Rita allegedly
purchased two parcels of land, Lot No. 4709 6 and half of
Lot No. 4706, 7 situated in Canda-uay, Dumaguete City.
The petitioners averred that Rita refused to effect a
partition of the said parcels of land.

In their Answer, 8 Florante, Rita and Panfila asserted that

they and the petitioners co-owned 22 9 out of the 43

Attorneysparcels
in of land mentioned in the latter s complaint,
whereas Rita actually owned 10 parcels of land out of 10

San Francisco
the 43 parcels which the petitioners sought to partition,
while the remaining 11 parcels of land are separately
owned by Petra Cafino Adanza, 11 Florante, 12 Meliton
Adalia, 13 Consorcia Adanza, 14 Lilia 15 and Santiago
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 ght for our clients.
Mendez. 16 Further, they claimed that Lot No. 4709 and
half of Lot No. 4706 were acquired by Rita using her own
money. They denied that Rita appropriated solely for
herself the income of the estate of Spouses Baylon, and
expressed no objection to the partition of the estate of
Spouses Baylon, but only with respect to the co-owned
Wood Litigation, parcels
APC of land.
During the pendency of the case, Rita, through a Deed of
Donation dated July 6, 1997, conveyed Lot No. 4709 and
half of Lot No. 4706 to Florante. On July 16, 2000, Rita
died intestate and without any issue. Thereafter, learning
of the said donation inter vivos in favor of Florante, the
petitioners filed a Supplemental Pleading 17 dated
February 6, 2002, praying that the said donation in favor
of the respondent be rescinded in accordance with
Article 1381(4) of the Civil Code. They further alleged
that Rita was already sick and very weak when the said
LA Process
Deed of Donation was supposedly executed and, thus,
could not have validly given her consent thereto.
Server
Florante and Panfila opposed the rescission of the said
donation, asserting that Article 1381(4) of the Civil Code
Enter and trackapplies
your only when there is already a prior judicial decree
on For
orders 24/7. Call who Abetween the contending parties actually owned
18
Free Quote!the properties under litigation. ςrνll

The RTC Decision

On October 20, 2005, the RTC rendered a Decision, 19 the

decretal portion of which reads: ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

Countrywide Process, LLC

Wherefore judgment is hereby
rendered: ςrαlαω

(1) declaring the existence of co-

ownership over parcels nos. 1, 2,
3, 5, 7, 10, 13, 14, 16, 17, 18, 26,
 SPONSORED SEARCHES 29, 30, 33, 34, 35, 36, 40 and 41
rescission of donation described in the complaint;

claim class action settlement (2) directing that the above

mentioned parcels of land be
supreme court cases by year partitioned among the heirs of
Florentino Baylon and Maximina
look up court cases
Baylon;

court cases in may (3) declaring a co-ownership on

the properties of Rita Baylon
SPONSORED SEARCHES namely parcels no[s]. 6, 11, 12, 20,
rescission of donation 24, 27, 31, 32, 39 and 42 and
directing that it shall be
claim class action settlement
partitioned among her heirs who
supreme court cases by year are the plaintiffs and defendant in
this case;
look up court cases
(4) declaring the donation inter
court cases in may vivos rescinded without prejudice
to the share of Florante Baylon to
SPONSORED SEARCHES the estate of Rita Baylon and
rescission of donation directing that parcels nos. 1 and 2
paragraph V of the complaint be
civil cases included in the division of the
property as of Rita Baylon among
claim class action settlement
her heirs, the parties in this case;

supreme court cases (5) excluding from the co-

ownership parcels nos. 20, 21, 22,
legal law cases
9, 43, 4, 8, 19 and 37.

chanrobles virtual law library

August-2012 Considering that the parties failed to settle

Jurisprudence               this case amicably and could not agree on
   the partition, the parties are directed to
nominate a representative to act as
A.C. No. 9094 - commissioner to make the partition. He shall
Santos Ventura immediately take [his] oath of office upon
Hocorma Foundation, [his] appointment. The commissioner shall
Inc., represented by make a report of all the proceedings as to the
Gabriel H. Abad v. partition within fifteen (15) days from the
Atty. Richard V. Funk completion of this partition. The parties are
given ten (10) days within which to object to
A.C. No. 6116 - the report after which the Court shall act on
Engr. Gilbert the commissioner report. ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

Tumbokon v. Atty.
Mariano R. Pefianco SO ORDERED. 20 (Emphasis ours)

A.C. No. 9259 - chanrobles virtual law library

Jasper Junno F.
The RTC held that the death of Rita during the pendency
Rodica v. Atty. Manuel
of the case, having died intestate and without any issue,
M. Lazaro, et al.
had rendered the issue of ownership insofar as parcels
of land which she claims as her own moot since the
A.C. No. 9390 -
parties below are the heirs to her estate. Thus, the RTC
Emilia O. Dhaliwal v.
regarded Rita as the owner of the said 10 parcels of land
Atty. Abelardo B.
and, accordingly, directed that the same be partitioned
Dumaguing
among her heirs. Nevertheless, the RTC rescinded the
donation inter vivos of Lot No. 4709 and half of Lot No.
A.M. No. P-10-
4706 in favor of Florante. In rescinding the said donation
2809 - Manolito C.
inter vivos, the RTC explained that:
villordon v. Marilyn C.
ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

Avila, Court Interpreter

However, with respect to lot nos. 4709 and
I, Municipal Trial Court
4706 which [Rita] had conveyed to Florante
in Cities. Branch 3,
Baylon by way of donation inter vivos, the
Cebu City
plaintiffs in their supplemental pleadings
(sic) assailed the same to be rescissible on
A.M. No. P-12-
the ground that it was entered into by the
3029 Formerly OCA
defendant Rita Baylon without the knowledge
I.P.I. No. 08-2850-P -
and approval of the litigants [or] of
Astorga and Repol
competent judicial authority. The subject
Law Offices,
parcels of lands are involved in the case for
represented by Atty.
which plaintiffs have asked the Court to
Arnold B. Lugares v.
partition the same among the heirs of
Leodel N. Roxas,
Florentino Baylon and Maximina Elnas.
Sheriff IV, Regional
Trial Court, Branch 66, Clearly, the donation inter vivos in favor of
Makati City Florante Baylon was executed to prejudice
the plaintiffs right to succeed to the estate of
 A.M. No. P-12- Rita Baylon in case of death considering that
3033 Formerly A.M. as testified by Florante Baylon, Rita Baylon
No. 10-8-97-MeTC - was very weak and he tried to give her
Memoranda of Judge vitamins x x x. The donation inter vivos
Eliza B. Yu issued to executed by Rita Baylon in favor of Florante
Legal Researcher Baylon is rescissible for the reason that it
Marie Joy P. Lagman refers to the parcels of land in litigation x x x
and to Court without the knowledge and approval of the
Stenographer Soledad plaintiffs or of this Court. However, the
J. Bassig, all of rescission shall not affect the share of
Metropolitan Trial Florante Baylon to the estate of Rita
Court, Branch 47, Baylon. 21 ςrνll

Pasay City
chanrobles virtual law library

A.M. No. P-12-

3080 Formerly OCA Florante sought reconsideration of the Decision dated
I.P.I. No. 10-3543-P - October 20, 2005 of the RTC insofar as it rescinded the
Judge Armando S. donation of Lot No. 4709 and half of Lot No. 4706 in his
Adlawan, Presiding favor. 22 He asserted that, at the time of Rita s death on
Judge, 6th MCTC, July 16, 2000, Lot No. 4709 and half of Lot No. 4706
Bonifacio-Don were no longer part of her estate as the same had
Mariano Marcos, already been conveyed to him through a donation inter
Misamis Occidental v. vivos three years earlier. Thus, Florante maintained that
Estrella P. Capilitan, Lot No. 4709 and half of Lot No. 4706 should not be
6th MCTC, Bonifacio- included in the properties that should be partitioned
Don Mariano Marcos, among the heirs of Rita.
Misamis Occidental
On July 28, 2006, the RTC issued an Order 23 which
G.R. No. 137582 - denied the motion for reconsideration filed by Florante.
Jose I. Medina v. The
The CA Decision
Hon. Court of
Appeals, et al. On appeal, the CA rendered a Decision 24 dated October
26, 2007, the dispositive portion of which reads: ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

G.R. No. 154213 -

Eastern WHEREFORE, the Decision dated October 20,
Mediterranean 2005 and Order dated July 28, 2006 are
Maritime Ltd., et al. v. REVERSED and SET ASIDE insofar as they
Estanislao Surio, et al. decreed the rescission of the Deed of
 G.R. No. 155830 - Donation dated July 6, 1997 and the inclusion
Numeriano P. Abobon of lot no. 4709 and half of lot no. 4706 in the
v. Felicitas Abata estate of Rita Baylon. The case is REMANDED
Abobon, et al. to the trial court for the determination of
ownership of lot no. 4709 and half of lot no.
G.R. No. 157917 - 4706. ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

Spouses Teodorico
and Nanette Pere a v. SO ORDERED. 25 ςrνll

Spouses Nicolas and

Teresita L. Zarate, et chanrobles virtual law library

al.
The CA held that before the petitioners may file an action
G.R. No. 159508 - for rescission, they must first obtain a favorable judicial
Juan B. Ba ez, Jr. v. ruling that Lot No. 4709 and half of Lot No. 4706 actually
Hon. Crisanto C. belonged to the estate of Spouses Baylon and not to
Concepcion, et al. Rita. Until then, the CA asserted, an action for rescission
is premature. Further, the CA ruled that the petitioners
G.R. No. 160444 - action for rescission cannot be joined with their action
Wallem Maritime for partition, accounting and damages through a mere
Services, Inc. v. supplemental pleading. Thus: ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

Ernesto C. Tanawan
If Lot No. 4709 and half of Lot No. 4706

G.R. No. 163026 - belonged to the Spouses estate, then Rita

Heirs of Arcadio Baylon s donation thereof in favor of Florante

Castro, Sr. Baylon, in excess of her undivided share

represented by therein as co-heir, is void. Surely, she could

Arcadio Castro, Jr. v. not have validly disposed of something she

Renato Lozada, et al. did not own. In such a case, an action for
rescission of the donation may, therefore,

G.R. No. 163286, prosper.

G.R. No. 166025 and If the lots, however, are found to have
G.R. No. 170269 - belonged exclusively to Rita Baylon, during
Mindanao Terminal her lifetime, her donation thereof in favor of
and Brokerage Florante Baylon is valid. For then, she merely
Service, Inc. v. Court exercised her ownership right to dispose of
of Appeals and what legally belonged to her. Upon her death,
Philippine Ports the lots no longer form part of her estate as
Authority/Philippine their ownership now pertains to Florante
Ports Authority v. Hon.
Cesar M. Solis, etc., et Baylon. On this score, an action for rescission
al. against such donation will not prosper. x x x.

Verily, before plaintiffs-appellees may file an

G.R. No. 163859 -
action for rescission, they must first obtain a
Dr. Fernando A.
favorable judicial ruling that lot no. 4709 and
Melendres M.D.,
half of lot no. 4706 actually belonged to the
Executive Director of
estate of Spouses Florentino and Maximina
the Lung Center of the
Baylon, and not to Rita Baylon during her
Philippines (LCP) v.
lifetime. Until then, an action for rescission is
President Anti-Graft
premature. For this matter, the applicability of
Commission, et al.
Article 1381, paragraph 4, of the New Civil
Code must likewise await the trial court s
G.R. No. 165166 -
resolution of the issue of ownership.
Charles Gotardo v.
Divina Buling Be that as it may, an action for rescission
should be filed by the parties concerned
G.R. No. 166660 - independent of the proceedings below. The
Dorotea Catayas v. first cannot simply be lumped up with the
Hon. Court of second through a mere supplemental
Appeals, Special
pleading. 26 (Citation omitted)
Former Twentieth
Division, Cebu City, et chanrobles virtual law library

al.
The petitioners sought reconsideration 27 of the Decision
G.R. NOS. 166948- dated October 26, 2007 but it was denied by the CA in its
59 - People of the Resolution 28 dated March 6, 2008. ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

Philippines v.
Meinrado Enrique A. Hence, this petition.
Bello, et al.
chanrobles virtual law library

G.R. No. 168856 -

Eastern Issue
Telecommunications
The lone issue to be resolved by this Court is whether
Philippines, Inc. v. The
the CA erred in ruling that the donation inter vivos of Lot
Commissioner of
No. 4709 and half of Lot No. 4706 in favor of Florante
Internal Revenue
may only be rescinded if there is already a judicial
determination that the same actually belonged to the
G.R. No. 169254 -
estate of Spouses Baylon.
De la Salle University
v. De la Salle The Court s Ruling ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

University Employees
Association The petition is partly meritorious.

G.R. No. 171076 -

chanrobles virtual law library

Goldloop Properties,
Procedural Matters
Inc. v. Government
Service Insurance Before resolving the lone substantive issue in the instant
System case, this Court deems it proper to address certain
procedural matters that need to be threshed out which,
G.R. No. 171132 - by laxity or otherwise, were not raised by the parties
Manuel D. Yngson, Jr., herein.
(in his capacity as the
Liquidator of ARCAM Misjoinder of Causes of Action

& Co., Inc.) v.

The complaint filed by the petitioners with the RTC
Philippine National
involves two separate, distinct and independent actions
Bank
partition and rescission. First, the petitioners raised the
refusal of their co-heirs, Florante, Rita and Panfila, to
G.R. No. 171182 -
partition the properties which they inherited from
University of the
Spouses Baylon. Second, in their supplemental pleading,
Philippines, et al. v.
the petitioners assailed the donation inter vivos of Lot
Hon. Agustin S. Dizon,
No. 4709 and half of Lot No. 4706 made by Rita in favor
et al.
of Florante pendente lite.

G.R. No. 172008 - The actions of partition and

Heirs of Rogelio Isip, rescission cannot be joined in a
Sr., et al. v. Rodolfo single action.
Quintos, et al.
By a joinder of actions, or more properly, a joinder of
causes of action is meant the uniting of two or more
G.R. No. 173268 -
demands or rights of action in one action, the statement
Ernesto A. Fajardo v.
of more than one cause of action in a declaration. It is
Office of the
the union of two or more civil causes of action, each of
Ombudsman, et al.
which could be made the basis of a separate suit, in the
same complaint, declaration or petition. A plaintiff may
G.R. No. 173474 -
under certain circumstances join several distinct
People of the
demands, controversies or rights of action in one
Philippines v.
Reynaldo Belocura y declaration, complaint or petition. 29 ςrνll

Perez

G.R. No. 174431 -
The Heirs of Jolly R.
Bugarin namely Ma.
Aileen H. Bugarin, Ma.
Linda B. Abiog and
Ma. Annette B.
Sumulong v. Republic
of the Philippines
G.R. No. 175256 -
Lily Lim v. Kou Co
Ping a.k.a. Charlie
Co/Kou Co Ping a.k.a.
Charlie Co v. Lili Lim
G.R. No. 175301 -
Edito Gulfo and
Emmanuela Gulfo v.
Jose P. Ancheta
G.R. No. 175969 -
Jarl Construction and
Armando K. Tejada v.
Simeon A. Atencio
G.R. No. 176984
and G.R. NO. 179131 -
Metropolitan Bank
and Trust Company v.
Servando Arguelles, et
al./Marilou Trinidad, et
al. v. Servano
Arguelles, et al.
G.R. No. 177137 -
People of the
Philippines v. Pedro G.
Banig
The objectives of the rule or provision are to avoid a
multiplicity of suits where the same parties and subject
matter are to be dealt with by effecting in one action a
complete determination of all matters in controversy and
litigation between the parties involving one subject
matter, and to expedite the disposition of litigation at
minimum cost. The provision should be construed so as
to avoid such multiplicity, where possible, without
prejudice to the rights of the litigants. 30 ςrνll
Nevertheless, while parties to an action may assert in
one pleading, in the alternative or otherwise, as many
causes of action as they may have against an opposing
party, such joinder of causes of action is subject to the
condition, inter alia, that the joinder shall not include
special civil actions governed by special rules. 31 ςrνll
Here, there was a misjoinder of causes of action. The
action for partition filed by the petitioners could not be
joined with the action for the rescission of the said
donation inter vivos in favor of Florante. Lest it be
overlooked, an action for partition is a special civil action
governed by Rule 69 of the Rules of Court while an
action for rescission is an ordinary civil action governed
by the ordinary rules of civil procedure. The variance in
the procedure in the special civil action of partition and
in the ordinary civil action of rescission precludes their
joinder in one complaint or their being tried in a single
proceeding to avoid confusion in determining what rules
shall govern the conduct of the proceedings as well as in
the determination of the presence of requisite elements
of each particular cause of action. 32 ςrνll
A misjoined cause of action, if not
severed upon motion of a party or
by the court sua sponte, may be
adjudicated by the court together
with the other causes of action.

G.R. No. 177907 -
Fair Shipping Corp.
and/or Kohyu Marine
Co, Ltd. v. Joselito T.
Medel
G.R. No. 178288 -
Sps. Charlie Fortaleza
and Ofelia Fortaleza v.
Sps. Raul Lapitan and
Nevertheless, misjoinder of causes of action is not a
ground for dismissal. Indeed, the courts have the power,
acting upon the motion of a party to the case or sua
sponte, to order the severance of the misjoined cause of
action to be proceeded with separately. 33 However, if
there is no objection to the improper joinder or the court
did not motu proprio direct a severance, then there exists
no bar in the simultaneous adjudication of all the
erroneously joined causes of action. On this score, our
disquisition in Republic of the Philippines v. Herbieto 34
is instructive, viz: ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

Rona Lapitan
This Court, however, disagrees with petitioner
G.R. No. 179232 Republic in this regard. This procedural lapse
and G.R. No. 179290 - committed by the respondents should not
The DOW Chemical affect the jurisdiction of the MTC to proceed
Company and with and hear their application for registration
Occidental Chemical of the Subject Lots. ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

Corporation v. Cecilio
Abenon, et al./Del xxx
Monte Fresh Produce
N.A. and Del Monte chanrobles virtual law library

Fresh Produce
Considering every application for land
Company v. DOW
registration filed in strict accordance with the
Chemical Company, et
Property Registration Decree as a single
al.
cause of action, then the defect in the joint
application for registration filed by the
G.R. No. 180614 -
respondents with the MTC constitutes a
Leonardo Notarte, et
misjoinder of causes of action and parties.
al. v. Godofredo
Instead of a single or joint application for
Notarte
registration, respondents Jeremias and
David, more appropriately, should have filed
G.R. No. 181180 -
separate applications for registration of Lots
Philasia Shipping
No. 8422 and 8423, respectively.
Agency Corporation,
et al. v. Andres G. Misjoinder of causes of action and parties do
Tomacruz not involve a question of jurisdiction of the
court to hear and proceed with the case.
 G.R. No. 182435 - They are not even accepted grounds for
Lilia B. Luz, et al. v. dismissal thereof. Instead, under the Rules of
Florante Baylon Court, the misjoinder of causes of action and
parties involve an implied admission of the
G.R. No. 184746 - court s jurisdiction. It acknowledges the
Spouses Crispin power of the court, acting upon the motion of
Galang and Caridad a party to the case or on its own initiative, to
Galang v. Spouses order the severance of the misjoined cause of
Conrado S. Reyes and action, to be proceeded with separately (in
Fe De Kastro Reyes case of misjoinder of causes of action);
(As substituted by and/or the dropping of a party and the
their legal heir: severance of any claim against said
Hermenigildo K. misjoined party, also to be proceeded with
Reyes) separately (in case of misjoinder of
parties). 35 (Citations omitted) chanroblesvirtuallawlibrary

G.R. No. 186169 -

Mylene Carvajal v. chanrobles virtual law library

Luzon Development
Bank and/or Oscar Z. It should be emphasized that the foregoing rule only
Ramirez applies if the court trying the case has jurisdiction over
all of the causes of action therein notwithstanding the
G.R. No. 186993 - misjoinder of the same. If the court trying the case has
Theodore and Nancy no jurisdiction over a misjoined cause of action, then
Ang, represented by such misjoined cause of action has to be severed from
Eldrige Marvin B. the other causes of action, and if not so severed, any
Aceron v. Spouses adjudication rendered by the court with respect to the
Alan and Em Ang same would be a nullity.

Here, Florante posed no objection, and neither did the

G.R. No. 187713 -
RTC direct the severance of the petitioners action for
Radio Philippine
rescission from their action for partition. While this may
Network, Inc., et al. v.
be a patent omission on the part of the RTC, this does
Ruth F. Yap, et al.
not constitute a ground to assail the validity and
correctness of its decision. The RTC validly adjudicated
G.R. No. 187734 -
the issues raised in the actions for partition and
People of the
rescission filed by the petitioners.
Philippines v. Antonio
ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

Osma, Jr. y Agaton

Asserting a New Cause of Action in a
Supplemental Pleading
 G.R. No. 189529 - chanrobles virtual law library

Government Service
Insurance System In its Decision dated October 26, 2007, the CA pointed
(GSIS) and Winston F. out that the said action for rescission should have been
Garcia, ih his capacity filed by the petitioners independently of the proceedings
as President and in the action for partition. It opined that the action for
General Manager of rescission could not be lumped up with the action for
the GSIS v. Maricar B. partition through a mere supplemental pleading. ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

Buenviaje-Carreon
We do not agree.
G.R. No. 189998 -
chanrobles virtual law library

Makati Shangri-La
Hotel and Resort, Inc. A supplemental pleading may raise
v. Ellen Johanne a new cause of action as long as it
Harper, et al. has some relation to the original
cause of action set forth in the
G.R. No. 190071 - original complaint. ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

Union Bank of the

Philippines v. Maunlad Section 6, Rule 10 of the Rules of Court
Homes, Inc., and all reads: ςrαlαω

other persons or
entities claiming Sec. 6. Supplemental Pleadings. Upon motion
rights under it of a party the court may, upon reasonable
notice and upon such terms as are just,
G.R. No. 190144 - permit him to serve a supplemental pleading
Bank of the Philippine setting forth transactions, occurrences or
islands v. Carlito Lee events which have happened since the date
of the pleading sought to be supplemented.
G.R. No. 190907 - The adverse party may plead thereto within
Veterans Philippine ten (10) days from notice of the order
Scout Security admitting the supplemental pleading.
Agency, Inc. v. First
Dominion Prime chanrobles virtual law library

Holdings, Inc.
In Young v. Spouses Sy, 36 this Court had the opportunity
G.R. No. 191192 - to elucidate on the purpose of a supplemental pleading.
People of the Thus: ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

Philippines v. Edgar
Balquedra
 As its very name denotes, a supplemental
G.R. No. 191532 - pleading only serves to bolster or add
Margarita Ambre Y something to the primary pleading. A
Cayuni v. People of supplement exists side by side with the
the Philippines original. It does not replace that which it
supplements. Moreover, a supplemental
G.R. No. 192908 - pleading assumes that the original pleading
Republic of the is to stand and that the issues joined with the
Philippines, original pleading remained an issue to be
represented by the tried in the action. It is but a continuation of
Department of Public the complaint. Its usual office is to set up
Works and Highways new facts which justify, enlarge or change the
(DPWH) v. St. Vincent kind of relief with respect to the same subject
De Paul Colleges, Inc. matter as the controversy referred to in the
original complaint.
G.R. No. 194721 -
The purpose of the supplemental pleading is
People of the
to bring into the records new facts which will
Philippines v. John
enlarge or change the kind of relief to which
Brian Amarillo y Mapa
the plaintiff is entitled; hence, any
a.k.a. "Jao Mapa"
supplemental facts which further develop the
original right of action, or extend to vary the
G.R. No. 195097 -
relief, are available by way of supplemental
Republic of the
complaint even though they themselves
Philippines v. Marlon
Medida constitute a right of action. 37 (Citations
omitted and emphasis ours)
G.R. No. 195243 -
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People of the
Philippines v. Raul Thus, a supplemental pleading may properly allege
Beriber y Fuentes transactions, occurrences or events which had
transpired after the filing of the pleading sought to be
G.R. No. 195428 - supplemented, even if the said supplemental facts
Jomar S. Verdadero v. constitute another cause of action.
Barney Autolines
Group of Companies Admittedly, in Leobrera v. Court of Appeals, 38 we held
Transport, Inc., et al. that a supplemental pleading must be based on matters
arising subsequent to the original pleading related to the
G.R. No. 198742 - claim or defense presented therein, and founded on the
Teodora Sobejana- same cause of action. We further stressed therein that a
Condon v. supplemental pleading may not be used to try a new
Commission on cause of action.
Elections, Luis M.
However, in Planters Development Bank v. LZK Holdings
Bautista, Robelito V.
Picar & Wilma P. and Development Corp., 39 we clarified that, while a
Pagaduan matter stated in a supplemental complaint should have
some relation to the cause of action set forth in the
G.R. No. 199877 - original pleading, the fact that the supplemental pleading
People of the technically states a new cause of action should not be a
Philippines v. Arturo bar to its allowance but only a matter that may be
Lara y Orbista considered by the court in the exercise of its discretion.
In such cases, we stressed that a broad definition of
G.R. No. 200134 - "cause of action" should be applied.
Roberto Otero v.
Here, the issue as to the validity of the donation inter
Roger Tan
vivos of Lot No. 4709 and half of Lot No. 4706 made by
Rita in favor of Florante is a new cause of action that
occurred after the filing of the original complaint.
However, the petitioners prayer for the rescission of the
said donation inter vivos in their supplemental pleading
is germane to, and is in fact, intertwined with the cause
of action in the partition case. Lot No. 4709 and half of
Lot No. 4706 are included among the properties that
were sought to be partitioned.

The petitioners supplemental pleading merely amplified

the original cause of action, on account of the gratuitous
conveyance of Lot No. 4709 and half of Lot No. 4706
after the filing of the original complaint and prayed for
additional reliefs, i.e., rescission. Indeed, the petitioners
claim that the said lots form part of the estate of
Spouses Baylon, but cannot be partitioned unless the
gratuitous conveyance of the same is rescinded. Thus,
the principal issue raised by the petitioners in their
original complaint remained the same.

Main Issue: Propriety of Rescission

After having threshed out the procedural matters, we

now proceed to adjudicate the substantial issue
presented by the instant petition.

The petitioners assert that the CA erred in remanding the

case to the RTC for the determination of ownership of
Lot No. 4709 and half of Lot No. 4706. They maintain
that the RTC aptly rescinded the said donation inter vivos
of Lot No. 4709 and half of Lot No. 4706 pursuant to
Article 1381(4) of the Civil Code.

In his Comment, 40 Florante asserts that before the

petitioners may file an action for rescission, they must
first obtain a favorable judicial ruling that Lot No. 4709
and half of Lot No. 4706 actually belonged to the estate
of Spouses Baylon. Until then, Florante avers that an
action for rescission would be premature. ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

The petitioners contentions are well-taken.

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The resolution of the instant dispute is fundamentally

contingent upon a determination of whether the
donation inter vivos of Lot No. 4709 and half of Lot No.
4706 in favor of Florante may be rescinded pursuant to
Article 1381(4) of the Civil Code on the ground that the
same was made during the pendency of the action for
partition with the RTC.

Rescission is a remedy to address

the damage or injury caused to the
contracting parties or third
persons.

Rescission is a remedy granted by law to the contracting

parties and even to third persons, to secure the
reparation of damages caused to them by a contract,
even if it should be valid, by means of the restoration of
things to their condition at the moment prior to the
celebration of said contract. 41 It is a remedy to make
ineffective a contract, validly entered into and therefore
obligatory under normal conditions, by reason of
external causes resulting in a pecuniary prejudice to one
of the contracting parties or their creditors. 42 ςrνll

Contracts which are rescissible are valid contracts

having all the essential requisites of a contract, but by
reason of injury or damage caused to either of the
parties therein or to third persons are considered
defective and, thus, may be rescinded.

The kinds of rescissible contracts, according to the

reason for their susceptibility to rescission, are the
following: first, those which are rescissible because of
lesion or prejudice; 43 second, those which are
rescissible on account of fraud or bad faith; 44 and third,
those which, by special provisions of law, 45 are
susceptible to rescission. 46 ςrνll

Contracts which refer to things

subject of litigation is rescissible
pursuant to Article 1381(4) of the
Civil Code.

Contracts which are rescissible due to fraud or bad faith

include those which involve things under litigation, if they
have been entered into by the defendant without the
knowledge and approval of the litigants or of competent
judicial authority. Thus, Article 1381(4) of the Civil Code
provides: ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

Art. 1381. The following contracts

are rescissible: ςrαlαω

xxx

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(4) Those which refer to things under

litigation if they have been entered into by the
defendant without the knowledge and
 approval of the litigants or of competent
judicial authority.

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The rescission of a contract under Article 1381(4) of the

Civil Code only requires the concurrence of the following:
first, the defendant, during the pendency of the case,
enters into a contract which refers to the thing subject of
litigation; and second, the said contract was entered into
without the knowledge and approval of the litigants or of
a competent judicial authority. As long as the foregoing
requisites concur, it becomes the duty of the court to
order the rescission of the said contract.

The reason for this is simple. Article 1381(4) seeks to

remedy the presence of bad faith among the parties to a
case and/or any fraudulent act which they may commit
with respect to the thing subject of litigation.

When a thing is the subject of a judicial controversy, it

should ultimately be bound by whatever disposition the
court shall render. The parties to the case are therefore
expected, in deference to the court s exercise of
jurisdiction over the case, to refrain from doing acts
which would dissipate or debase the thing subject of the
litigation or otherwise render the impending decision
therein ineffectual.

There is, then, a restriction on the disposition by the

parties of the thing that is the subject of the litigation.
Article 1381(4) of the Civil Code requires that any
contract entered into by a defendant in a case which
refers to things under litigation should be with the
knowledge and approval of the litigants or of a
competent judicial authority.

Further, any disposition of the thing subject of litigation

or any act which tends to render inutile the court s
impending disposition in such case, sans the knowledge
and approval of the litigants or of the court, is
unmistakably and irrefutably indicative of bad faith. Such
acts undermine the authority of the court to lay down the
respective rights of the parties in a case relative to the
thing subject of litigation and bind them to such
determination.

It should be stressed, though, that the defendant in such

a case is not absolutely proscribed from entering into a
contract which refer to things under litigation. If, for
instance, a defendant enters into a contract which
conveys the thing under litigation during the pendency of
the case, the conveyance would be valid, there being no
definite disposition yet coming from the court with
respect to the thing subject of litigation. After all,
notwithstanding that the subject thereof is a thing under
litigation, such conveyance is but merely an exercise of
ownership.

This is true even if the defendant effected the

conveyance without the knowledge and approval of the
litigants or of a competent judicial authority. The
absence of such knowledge or approval would not
precipitate the invalidity of an otherwise valid contract.
Nevertheless, such contract, though considered valid,
may be rescinded at the instance of the other litigants
pursuant to Article 1381(4) of the Civil Code.

Here, contrary to the CA s disposition, the RTC aptly

ordered the rescission of the donation inter vivos of Lot
No. 4709 and half of Lot No. 4706 in favor of Florante.
The petitioners had sufficiently established the presence
of the requisites for the rescission of a contract pursuant
to Article 1381(4) of the Civil Code. It is undisputed that,
at the time they were gratuitously conveyed by Rita, Lot
No. 4709 and half of Lot No. 4706 are among the
properties that were the subject of the partition case
then pending with the RTC. It is also undisputed that
Rita, then one of the defendants in the partition case
with the RTC, did not inform nor sought the approval
from the petitioners or of the RTC with regard to the
donation inter vivos of the said parcels of land to
Florante.

Although the gratuitous conveyance of the said parcels

of land in favor of Florante was valid, the donation inter
vivos of the same being merely an exercise of
ownership, Rita s failure to inform and seek the approval
of the petitioners or the RTC regarding the conveyance
gave the petitioners the right to have the said donation
rescinded pursuant to Article 1381(4) of the Civil Code.

Rescission under Article 1381(4) of

the Civil Code is not preconditioned
upon the judicial determination as
to the ownership of the thing
subject of litigation.

In this regard, we also find the assertion that rescission

may only be had after the RTC had finally determined
that the parcels of land belonged to the estate of
Spouses Baylon intrinsically amiss. The petitioners right
to institute the action for rescission pursuant to Article
1381(4) of the Civil Code is not preconditioned upon the
RTC s determination as to the ownership of the said
parcels of land.

It bears stressing that the right to ask for the rescission

of a contract under Article 1381(4) of the Civil Code is
not contingent upon the final determination of the
ownership of the thing subject of litigation. The
primordial purpose of Article 1381(4) of the Civil Code is
to secure the possible effectivity of the impending
judgment by a court with respect to the thing subject of
litigation. It seeks to protect the binding effect of a court
s impending adjudication vis-à -vis the thing subject of
litigation regardless of which among the contending
claims therein would subsequently be upheld.
Accordingly, a definitive judicial determination with
respect to the thing subject of litigation is not a
condition sine qua non before the rescissory action
contemplated under Article 1381(4) of the Civil Code
may be instituted.

Moreover, conceding that the right to bring the

rescissory action pursuant to Article 1381(4) of the Civil
Code is preconditioned upon a judicial determination
with regard to the thing subject litigation, this would only
bring about the very predicament that the said provision
of law seeks to obviate. Assuming arguendo that a
rescissory action under Article 1381(4) of the Civil Code
could only be instituted after the dispute with respect to
the thing subject of litigation is judicially determined,
there is the possibility that the same may had already
been conveyed to third persons acting in good faith,
rendering any judicial determination with regard to the
thing subject of litigation illusory. Surely, this paradoxical
eventuality is not what the law had envisioned.

Even if the donation inter vivos is

validly rescinded, a determination
as to the ownership of the subject
parcels of land is still necessary.

Having established that the RTC had aptly ordered the

rescission of the said donation inter vivos in favor of
Florante, the issue that has to be resolved by this Court
is whether there is still a need to determine the
ownership of Lot No. 4709 and half of Lot No. 4706.

In opting not to make a determination as to the

ownership of Lot No. 4709 and half of Lot No. 4706, the
RTC reasoned that the parties in the proceedings before
it constitute not only the surviving heirs of Spouses
Baylon but the surviving heirs of Rita as well. As
intimated earlier, Rita died intestate during the pendency
of the proceedings with the RTC without any issue,
leaving the parties in the proceedings before the RTC as
her surviving heirs. Thus, the RTC insinuated, a definitive
determination as to the ownership of the said parcels of
land is unnecessary since, in any case, the said parcels
of land would ultimately be adjudicated to the parties in
the proceedings before it. ςηαñrοblεš  Î½Î¹r†υαl  lαω  lιbrαrÿ

We do not agree.

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Admittedly, whoever may be adjudicated as the owner of

Lot No. 4709 and half of Lot No. 4706, be it Rita or
Spouses Baylon, the same would ultimately be
transmitted to the parties in the proceedings before the
RTC as they are the only surviving heirs of both Spouses
Baylon and Rita. However, the RTC failed to realize that a
definitive adjudication as to the ownership of Lot No.
4709 and half of Lot No. 4706 is essential in this case as
it affects the authority of the RTC to direct the partition
of the said parcels of land. Simply put, the RTC cannot
properly direct the partition of Lot No. 4709 and half of
Lot No. 4706 until and unless it determines that the said
parcels of land indeed form part of the estate of
Spouses Baylon.

It should be stressed that the partition proceedings

before the RTC only covers the properties co-owned by
the parties therein in their respective capacity as the
surviving heirs of Spouses Baylon. Hence, the authority
of the RTC to issue an order of partition in the
proceedings before it only affects those properties
which actually belonged to the estate of Spouses
Baylon.

In this regard, if Lot No. 4709 and half of Lot No. 4706,
as unwaveringly claimed by Florante, are indeed
exclusively owned by Rita, then the said parcels of land
may not be partitioned simultaneously with the other
properties subject of the partition case before the RTC.
In such case, although the parties in the case before the
RTC are still co-owners of the said parcels of land, the
RTC would not have the authority to direct the partition
of the said parcels of land as the proceedings before it is
only concerned with the estate of Spouses Baylon.

WHEREFORE, in consideration of the foregoing

disquisitions, the petition is PARTIALLY GRANTED. The
Decision dated October 26, 2007 issued by the Court of
Appeals in CA-G.R. CV No. 01746 is MODIFIED in that the
Decision dated October 20, 2005 issued by the Regional
Trial Court, Tanjay City, Negros Oriental, Branch 43 in
Civil Case No. 11657, insofar as it decreed the rescission
of the Deed of Donation dated July 6, 1997 is hereby
REINSTATED. The case is REMANDED to the trial court
for the determination of the ownership of Lot No. 4709
and half of Lot No. 4706 in accordance with this
Decision.

SO ORDERED.

Endnotes:

* Additional member per Special Order No.

1274 dated July 30, 2012 vice Associate
Justice Maria Lourdes P.A. Sereno.

1 Penned by Associate Justice Amy C.

Lazaro-Javier, with Associate Justices
Pampio A. Abarintos and Francisco P. Acosta,
concurring; rolla, pp. 17-24.

2 Under the sal a of Judge Winston M.

Villegas; id. at 68-77.

3 Id. at 59.

4 Id. at 36-51.

5 Covered by Original Certificate of Title

(OCT) Nos. FV-17761, FV-17763, FV-17753,
FV-17775, FV-29781, FV-17757, FV-17754,
FV-17776, FV-17778, FV-17760, FV-17758,
FV-17762, FV-17764, FV-17766, FV-17767,
FV-17769 and FV-27756 and Tax Declaration
Nos. 85-11-071, 85-04-019, 85-11-013, 85-06-
047, 85-06-048, 85-07-069, 88-06-109-A, 94-
25-0021-A, 94-25-0020-A, 94-25-0056-A, 94-
25-0057-A, 94-25-0286-A, 94-25-0285-A, 85-
13-086, 85-06-007, 85-13-148, 85-09-010-A,
85-13-047, 85-09-076-A, 85-09-054-A, 93-001-
10-270R, 85-09-044-A, 85-08-035, 85-08-058,
85-09-134 and 85-11-068.

6 Covered by Transfer Certificate of Title

(TCT) No. 2775.

7 Covered by TCT No. 2973.

8 Rollo, pp. 53-55.

9 OCT Nos. FV-17761, FV-17763, FV-17753,

FV-29781, FV-17754, FV-17760, FV-17764,
FV-17767 and FV-17769 and Tax Declaration
Nos. 85-11-071, 85-11-013, 85-06-047, 85-06-
048, 94-25-0285-A, 85-06-007, 85-13-148, 85-
09-010-A, 85-09-054-A, 93-001-10-270R, 85-
09-044-A, 85-08-035 and 85-09-134.

10 OCT Nos. FV-17757, FV-17758, FV-17762,

FV-17766 and FV-27756 and Tax Declaration
Nos. 88-06-109-A, 94-25-0057-A, 85-13-086,
85-13-047 and 85-09-076-A.

11 OCT No. FV-17778 and Tax Declaration

No. 85-11-068.

12 OCT Nos. FV-17775 and FV-17776 and Tax

Declaration Nos. 85-07-069, 94-25-0056-A
and 85-08-058.

13 Tax Declaration No. 85-04-019.

14 Tax Declaration No. 94-25-0021-A.

15 Tax Declaration No. 94-25-0020-A.

16 Tax Declaration No. 94-25-0286-A.

17 Rollo, pp. 57-58.

18 Id. at 20.

19 Id. at 68-77.

20 Id. at 77.

21 Id. at 76-77.

22 Id. at 78-79.

23 Id. at 80-81.

24 Id. at 17-24.

25 Id. at 23.

26 Id. at 22-23.

27 Id. at 25-28.

28 Id. at 31.

29 Republic v. Hernandez, 323 Phil. 606, 624-

625 (1996).

30 Id. at 625.

31 THE RULES OF COURT, Rule 2, Section 5.

32 See Francisco, Remedial Law

Compendium, Vol. 1, 9th Rev. Ed., p. 77.

33 THE RULES OF COURT, Rule 2, Section 6.

 34 498 Phil. 227 (2005).

35 Id. at 237-239.

36 534 Phil. 246 (2006).

37 Id. at 260.

38 252 Phil. 737 (1989).

39 496 Phil. 263 (2005).

40 Rollo, pp. 96-99.

41 Tolentino, COMMENTARIES AND

JURISPRUDENCE ON THE CIVIL CODE OF
THE PHILIPPINES, Vol. IV, 1991 ed., p. 570.

42 Caguioa, Comments and Cases on Civil

Law, Vol. IV, 1968 ed., pp. 443-444.

43 See CIVIL CODE OF THE PHILIPPINES,

Articles 1381(1) and (2) and 1098.

44 See CIVIL CODE OF THE PHILIPPINES,

Articles 1381(3) and (4) and 1382.

45 See CIVIL CODE OF THE PHILIPPINES,

Articles 1189, 1191, 1526, 1534, 1538, 1539,
1542, 1556, 1560, 1567 and 1659.

46 Supra note 42, at 446; Reyes and Puno, An

Outline of Philippine Civil Law, Vol. IV, 1957
ed., pp. 233-235.

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